Investigating the Role of Green Innovation in Economic Growth and Carbon Emissions Nexus for China: New Evidence Based on the PSTR Model

Abstract

In the context of climate change and high-quality economic growth, the penetration of green innovation is crucial for attaining sustainable economic development. However, the economic growth and carbon emissions nexus has not been fully investigated from the green innovation perspective. Using green innovation as the transition variable, this research employs the panel smooth transition regression model to examine the influence of economic growth on carbon emissions in 30 Chinese provinces over the period 2000–2019. The empirical results indicate that economic growth and carbon emissions have a substantially nonlinear nexus. The promoting influence of economic growth on carbon emissions is offset and even transformed into an inhibiting effect as green innovation degree rises; that is, green innovation alters the economic growth and carbon emissions nexus and plays a considerable part in carbon reduction for China. Additionally, the temporal variations analysis indicates that the positive nexus economic growth effect exerted on carbon emissions decreases gradually as time goes on. In terms of spatial variations, economic growth in the eastern area with higher levels of green innovation exerts the least positive impacts on carbon emissions. The research findings indicate that it is crucial for the Chinese government to lay down effective environmental protection policies to stimulate the enthusiasm of green innovation for social entities.